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Cobweb model with buffer stock for the stabilization of tomato prices in Ghana

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dc.contributor.author Anokye, Martin
dc.contributor.author Oduro, Francis T.
dc.date.accessioned 2021-08-26T12:36:38Z
dc.date.available 2021-08-26T12:36:38Z
dc.date.issued 2013-01-16
dc.identifier.issn 23105496
dc.identifier.uri http://hdl.handle.net/123456789/5974
dc.description 11p:, ill. en_US
dc.description.abstract In this paper a linear cobweb model is developed to study the phenomenon of commodity price fluctuations and then a buffer stock incorporated into the model to stabilize the price of fresh tomatoes in Ghana. The model performed on the assumptions that fresh tomatoes have no equal substitutes, and that there is no foreign competition and also no exogenous shocks needed to generate price fluctuations. The analysis detected that the slope of the demand function of price was smaller than the slope of the supply function of price curve implying that the price and quantity supplied of the fresh tomatoes would oscillate around a fixed price and quantity and also spiral outward. The “Keep Supply at Average” (KSA) buffer scheme achieved price and quantity stability in the short run. The mean price of the scheme was GH¢17.31, very close to actual price mean of Gh¢ 13.40 in the first 16 quarters. The standard deviation of the scheme price also dropped to 1.2 from 9.13 during price stabilization compared to 14.60 of actual price mean. In the long run the scheme price went up to Gh¢ 18.22, an increase of Gh¢ 0.91 and it is clear that in long run buffer system will fail unless the average supply is reviewed regularly. The scheme price trend equation indicated that with the implementation of the buffer scheme, the average quarterly price of fresh tomatoes increased by only 0.05 en_US
dc.language.iso en en_US
dc.publisher University of Cape Coast en_US
dc.subject Cobweb model en_US
dc.subject Buffer stock en_US
dc.subject Commodity price stabilization en_US
dc.title Cobweb model with buffer stock for the stabilization of tomato prices in Ghana en_US
dc.type Article en_US


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